Conservatives and the Minimum Wage

Conservatives traditionally have regarded minimum-wage laws with skepticism – and for good reason. Attempts by government to interfere with market forces in setting wages rarely work out as intended. But a group of conservative pundits and activists recently joined President Obama and others on the left in calling for hefty increases for low-wage workers.

Have they all gone mad? Not exactly – though the motives and tactics of some of the new minimum-wage proponents may surprise their allies on the left.

Some conservatives, including activist Phyllis Schlafly, actually have endorsed increasing the federal minimum wage. Ron Unz, a onetime GOP gubernatorial candidate and former publisher of The American Conservative, favors a state hike. He tried to put an initiative on the California ballot this fall that would raise the California minimum wage to $12 an hour but backed off this week when he failed to entice others to help fund the campaign. Still others, such as columnists Ann Coulter and Laura Ingraham, want federal intervention of a different sort, which they claim would raise pay for millions of low-wage workers.

What unites these conservatives is their desire to halt immigration – legal, as well as illegal. Unz is explicit in making the case. The Daily Caller reports that Unz thinks his $12/hour plan would “flood American businesses with Americans who have dropped out of the workforce, and also push low-skilled illegals to the sidelines and eventually south of the border.”

Provocateur Coulter agrees, though she thinks the process should work in reverse. Stop immigration, and wages will rise. “Republicans could guarantee a $14 minimum wage simply by closing the pipeline of more than one million poor immigrants coming in every year,” she wrote in a recent column.

Not so fast. Here’s what Unz, Schlafly, Coulter and the other pro-wage hike conservatives seem to forget: You can’t force people to work, nor can you force employers to hire workers at wages that exceed their productivity and thereby reduce profits.

Two industries come to mind: meat processing and agriculture, both of which depend heavily on immigrant labor. (I know something about the former because I served on the board of one of the largest poultry companies in the U.S., Pilgrim’s Pride, until the company was sold in 2009.)

The meat-processing industry is heavily dependent on immigrant labor. About a third of workers nationally are Hispanic, mostly immigrants, but average wages in most meat-processing jobs already meet Unz’s floor.

In 2012, the Department of Labor reported average hourly wages for meat slaughterers and cutters were $11.99 an hour. Lower-skilled trimmers and cutters earned less, $11.39 on average nationally. Despite wages significantly higher than the minimum wage, few workers choose to take these jobs, which are difficult, dirty and dangerous. And those Americans who might give these jobs a try are unlikely to stay long. Employee turnover rates for many meat-processing companies already exceed 100 percent a year.

The same is true in agriculture, which is even more dominated by immigrant workers. The average hourly wages for agricultural workers listed by the Bureau of Labor Statistics for 2012 was $14 an hour. But despite Coulter’s fantasies, few Americans are lining up for jobs picking crops while stooped under the hot sun eight hours a day.

Nor would raising the minimum wage succeed in forcing employers to hire workers whose labor isn’t worth higher pay. Employers still have to make a profit. And in labor-intensive industries, companies that want to stay in business either pass those costs on to customers, hire fewer workers to do the same amount of work, replace workers with machines, or pack up and leave.

Closing the door to immigrant workers and raising the minimum wage would produce fewer American jobs, not more.

Unz says greater mechanization would produce better, higher paying jobs in the U.S. He told The Daily Caller that cheaper machines would replace some workers, but that the demand would spur high-tech companies to hire well-paid American technicians, designers and production workers. Really? A disproportionate number of the types of workers he describes are foreign-born engineers, computer programmers and assembly-line workers.

Raising the minimum wage and shutting off immigration are both attacks on the free market. Conservatives, of all people, ought to know better.

The Patriot Post® · Conservatives and the Minimum Wage